You have invested your time, energies, and resources into creating a profitable company. As your business grows and flourishes, it will be critical to have a better inventory management system in place. In other words, don’t let business inventory management issues take a back seat to other areas of your business. After all, better inventory management can only help your business become even more profitable.
Business inventory management techniques must be employed to streamline your inventory, ensure that your inventory is moving briskly, and that your profit margin and ability to finance inventory continues to grow. There are several universal strategies any company can implement to better manage inventory:
- Do not carry more inventory than you need Extra business inventory is like a monkey on your back. It costs money to hold onto it, so maintaining a good business inventory without overloading yourself with excess inventory is the first hurdle you will need to leap in order to achieve better inventory management..
Although this process takes a good deal of trial and error, it is an important aspect of business inventory management, and it should be one of the top priorities of your business.
- Negotiate with your suppliers about extended payment terms, drop shipments and consignment agreements. Remember: almost any term is negotiable, and your business inventory agreement with your supplier is no exception. See our video on words you can use to negotiate.
- Remember that you cannot extend longer finance terms to your customers than your suppliers extend to you. Consider purchase-order financing and asset-based lending to stretch your dollar. And, as always, negotiate finance terms with your supplier.
- If your old business inventory isn’t moving, hold discounts and promotions to clean house. If your inventory isn’t fresh, your sales probably aren’t either, so attract new business with special discounts and sales. Customers always love a good sale, and so will you as you clear out your inventory and make way for newer fresher inventory!
- Always keep good records so that you always have a good idea of your sales volume and current level of stock. This allows for better inventory management and better overall profits. Keep accurate records of your average sales, maximum sales, bulk order quantity, order lead time, quantity on hand, and quantity on order so you can effectively manage your inventory every step of the way.
- Consider investing in quality business inventory management software. Good business inventory management software can make your small business run more efficiently, as well as help slash your inventory costs by controlling your stock levels.
There are multiple features of good business inventory management software, such as pricing strategies to understand, and you must consider the needs of your business when selecting inventory management software.
Business inventory management software can help create invoices, purchase orders, receiving lists, payment receipts and the like, thereby helping you to keep generate income for your business.
Remember, however, that an effective business inventory management software system is only useful if it is easy to understand and use. In other words, an abundance of features, bells and whistles may seem like a good thing, but they may end up confusing and frustrating you. A general rule of thumb is to keep your business inventory management software simple and easy to understand.
With these tips, better inventory management is only a few steps away!